If There Are External Benefits or Positive Externalities Associated with Consumption

question 56

Multiple Choice

If there are external benefits or positive externalities associated with consumption and production of a product, it can be said that the:

• A)government should consider placing a special tax on producers.
• B)government should consider prohibiting the production of the commodity.
• C)supply curve for the product lies too far to the right to provide an efficient allocation of resources.
• D)demand curve understates the total benefit from the product and resources are under-allocated to its production.

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Definitions:

UCC Applies

Indicates that the Uniform Commercial Code, a comprehensive set of laws governing commercial transactions, is relevant to a particular legal issue.

Breach Of Contract

The failure to fulfill the terms of a contract without lawful excuse, which may lead to legal action.

Acceptance Of Offer

The action by which the recipient of an offer agrees to the terms of the offer, creating a legally binding contract between the parties.

International Sale Of Goods

Transactions involving the commercial exchange of goods between sellers and buyers from different countries, governed by international agreements and laws.